How Women Can Reduce Debt and Make Life More AffordableOct 14, 2018
Affordability challenges are in front of us every day — from something as small as the fares going up on the bus you take every morning, or as big as the cost of renting or buying a home. For many Canadians who struggle with affordability though, it’s not just about cost up living going up, it’s about the need to reduce debt.
According to BDO Canada’s inaugural Affordability Index, though, it’s Canadian women who are more likely than men to struggle with affordability. Our survey found that women have a harder time saving for a major purchase (74 per cent versus 64 per cent of men) and affording transportation costs (43 per cent versus 36 per cent of men).
Women are also feel like they’re less prepared for significant life events. These important expenses include paying off a credit card, buying a car, buying a home, pursuing higher education or retiring at your ideal age. In fact, 73 per cent of women find it challenging to save for retirement, compared to 65 per cent of men.
So why are women having a harder time than their male counterparts? On face value, it’s a difficult question. Some experts have weighed in on the possibilities, though.
Try to make yourself a priority
This Market Watch article points out that mothers may think of their children’s future (or any family member’s) before their own. And then there’s the wage gap — women traditionally make less than men, and their careers can be interrupted by child rearing or caring for elderly parents. Any or all of these circumstances can make it harder for women to save money for the future or pay off consumer debt.
Take hold of financial independence
Another survey, this one done by the Financial Planning Standards Council back in March, found that 38 per cent of women know very little about finance and investment, while 28 per cent are financially dependent on their partner or someone else to handle their finances.
Financial independence can be difficult when women are living busy lives, but carving out some time to talk about money with friends can be incredibly valuable. If you’re feeling less than knowledgeable about money, think about starting a “money group” with other women. Or make use of the wealth of financial literacy resources online, like the Financial Consumer Agency of Canada and Practical Money Skills Canada.
It’s also important for women not to feel stigma about seeking professional advice when it comes to their debt. Talking to an professional like a Licensed Insolvency Trustee (LIT) about how best to reduce debt is a positive first step towards debt relief. An LIT will review your situation and explain available debt solutions. If personal debt is heavier or unmanageable, an LIT is the only debt professional who can help with formal solutions like a consumer proposal.
You can learn more about the role of an LIT here.
Find resources tailored for women
There’s no question that women face unique financial challenges. As part of boosting literacy, there are lots of resources online for women to take advantage of. One of those is the “I’m Worth It” guide from the Financial and Consumer Services Commission. This booklet includes a “values guide” that gets you thinking about money constructively by evaluating why you make the decisions you do.
Taking action like this is a perfect start for women (and men) trying to reduce debt and make life more affordable.